Bright Outlook for Oil Services and Equipment Companies as Sector Moves Forward from 2012's Sluggish Activity

Wall Street Transcript

67 WALL STREET, New York - February 28, 2013 - The Wall Street Transcript has just published its Oil & Gas: Drilling Equipment and Services Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Capital Expenditures and Consolidation Activity - Frontier Exploration and Development - Shale Drilling Capital Expenditures - Oil Price Expectations - Shale Drilling Dynamics - Shale, Offshore and Deepwater Drilling - Oil and Gas Price Divergence - Offshore Deepwater Oil Discoveries

Companies include: Baker Hughes Inc. (BHI), Halliburton Company (HAL), Schlumberger Limited (SLB), Weatherford International Ltd. (WFT), Atwood Oceanics Inc. (ATW), Diamond Offshore Drilling Inc. (DO), Ensco International Inc. (ESV), Hercules Offshore, Inc. (HERO), Noble Corp. (NE), Rowan Companies Inc. (RDC), Transocean Ltd. (RIG), Helmerich & Payne Inc. (HP), Nabors Industries Ltd. (NBR), Patterson-UTI Energy Inc. (PTEN), Cameron International Corporat (CAM), Lufkin Industries Inc. (LUFK), National Oilwell Varco, Incorp (NOV), Oceaneering International, Inc (OII), Chesapeake Energy Corporation (CHK) and many more.

In the following excerpt from the Oil & Gas: Drilling Equipment and Services Report, an expert analyst discusses the outlook for the sector for investors:

TWST: What's your broad-brush sentiment on the space right now?

Mr. Browne: My opinion sort mirrors what we've seen in the stock performance year to date. Energy as a whole underperformed last year, particularly oilfield services in the second half of the year.

This year, I think that the outlook is really bright, coming off of some of the sluggish activity of 2012 toward the end of 2012. We've seen that year to date, as a number of names have come off lows and rebounded quite well.

I'd point to one of my top picks right now, Halliburton. We upgraded HAL around mid-November from "neutral" to "outperform," and since then the stock has rallied more than 35%. As a subsector, large-cap diversified services is our favorite segment in the space right now.

We think that these companies are going to benefit from sustained spending in exploration and drilling for new reserves, be that in North America unconventional plays or in global offshore drilling. Our top picks on that theme are Halliburton and Schlumberger.

TWST: What drove you to upgrade Halliburton in November?

Mr. Browne: Stepping back a bit, I grew very bearish on the name following two things. First, we started to see pricing degradation in fracking services in North America, driven by the crude oil prices that fell off on global macroeconomic fears. But we did not see a huge downturn in activity; instead, we saw a number of operators pushing some of their noncritical projects to the right...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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